The Securities and Exchange Commission proposed new rules Wednesday that would enable large investors (institutions, individual shareholder alliances and the like) to nominate as many as one-fourth of a company's independent directors. The New York Times reports the commissioners voted 3-2 to approve the proposals and open them for public comment.
SEC Chair Mary Schapiro indicated the new rules are intended to address concerns that current corporate boards do not exercise enough control over executives in terms of compensation and risk management. She said:
Concerns have included questions about whether boards are exercising appropriate oversight of management, whether boards are appropriately focused on shareholder interests and whether boards need to be more accountable...
Though similar proposals have been considered in the past, NYT writer Stephen Labaton notes this one has "more political momentum." He says:
President Obama has repeatedly endorsed the idea of giving shareholders a greater say in the governance of corporations, and he sponsored legislation to accomplish that when he was a Democratic senator from Illinois.